- Full Year Total Net Revenues of $1.1
Billion, Up 14% Over 2012
- Full Year Non-GAAP Adjusted Operating
Income of $189.7 Million; Full Year GAAP Operating Income of $26.4
Million
- Full Year Non-GAAP Diluted EPS of
$1.45; Full Year GAAP Diluted EPS of $(0.27)
Cubist Pharmaceuticals, Inc. (NASDAQ: CBST) today announced
results for the fourth quarter and year ended December 31, 2013 and
provided 2014 revenue guidance. The Company will host a conference
call and webcast today at 5:00 p.m. ET to discuss the results and
other business updates (details below).
Financial highlights for the fourth quarter of 2013
(unaudited):
- Total net revenues were $299.7 million
compared to $245.9 million in the same period in 2012.
- Non-GAAP adjusted operating income was
$43.6 million compared to $54.2 million in the fourth quarter of
2012. GAAP operating loss was $15.5 million compared to GAAP
operating income of $45.3 million in the fourth quarter of
2012.
- Non-GAAP diluted earnings per share
(EPS) was $0.29 compared to $0.42 in the fourth quarter of 2012.
GAAP diluted loss per share was $(0.08) compared to GAAP diluted
EPS of $0.51 in the fourth quarter of 2012.
Financial highlights for the full year of 2013
(unaudited):
- Total net revenues grew 14% to $1.1
billion compared to $926.4 million in 2012.
- Non-GAAP adjusted operating income was
$189.7 million compared to $274.5 million in 2012. GAAP operating
income was $26.4 million compared to $237.1 million in 2012.
- Non-GAAP diluted EPS was $1.45 compared
to $2.15 in 2012. GAAP diluted loss per share was $(0.27) compared
to GAAP diluted EPS of $2.10 in 2012.
“With our acquisitions of Trius and Optimer and positive
ceftolozane/tazobactam data, we solidified our global antibiotics
leadership in 2013 and enhanced our position in the acute care
space,” said Michael Bonney, CEO of Cubist. “With strong growth in
our marketed products, a robust pipeline, and significant momentum
coming out of last year, we enter 2014 focused on executing our
major, near-term milestones and driving further progress on our
Building Blocks of Growth.”
As previously announced on January 13, 2014, fourth quarter 2013
U.S. CUBICIN® (daptomycin for injection) net product revenues were
$248.9 million, up 15% over the fourth quarter of 2012, and full
year U.S. CUBICIN net product revenues were $908.0 million, up 12%
over 2012. Cubist’s share of full year 2013 international CUBICIN
revenues was $58.7 million, which represents a 16% increase over
$50.5 million in 2012. U.S. net product revenues of DIFICID®
(fidaxomicin) following the completion of the Company’s acquisition
of Optimer Pharmaceuticals, Inc. (Optimer) on October 24, 2013 were
$12.2 million. Cumulative net sales of DIFICID in the U.S. and
Canada from October 1, 2013, through December 31, 2013, were $15.8
million, which includes $3.5 million in net sales recorded by
Optimer prior to the acquisition. Fourth quarter ENTEREG®
(alvimopan) net product revenues were $13.8 million, up 26%
compared to $10.9 million in the fourth quarter of 2012. Full year
ENTEREG net product revenues were $51.0 million, up 27% compared to
$40.2 million in 2012.
In the fourth quarter, total net revenues were $299.7 million,
up 22% over $245.9 million in the same period in 2012. Full year
total net revenues grew 14% to $1.1 billion compared to $926.4
million in 2012.
Reflecting the critical investments the Company made in its
late-stage development programs, including ceftolozane/tazobactam,
and the initial build-out of its European infrastructure, non-GAAP
adjusted operating income was $43.6 million compared to $54.2
million in the fourth quarter of 2012; GAAP operating loss in the
fourth quarter was $15.5 million compared to operating income of
$45.3 million in 2012. Non-GAAP adjusted operating income for the
full year was $189.7 million compared to $274.5 million in 2012;
GAAP operating income for the full year 2013 was $26.4 million
compared to $237.1 million in 2012.
As of December 31, 2013, Cubist had $578.6 million in cash, cash
equivalents and investments. The total number of Cubist’s common
shares outstanding as of December 31, 2013 was 74,428,087.
2014 Revenue Guidance
The company also announced the following 2014 annual revenue
guidance (in millions):
TOTAL NET REVENUE $1,190 -
$1,275 U.S. Net CUBICIN $970 - $1,020 All Other Product
Revenue $205 - $235 Service and Other Revenues $15 -
$20
Recent Highlights & Milestones
Acquisition of Optimer Pharmaceuticals
- On October 24, 2013, Cubist completed
the acquisition of Optimer Pharmaceuticals, Inc. for an aggregate
upfront cash consideration of $551 million, excluding transaction
costs.
Tedizolid phosphate – a novel oxazolidinone being
developed for both intravenous (I.V.) and oral administration for
the treatment of certain serious Gram-positive bacterial
infections, including those caused by methicillin-resistant
Staphylococcus aureus (MRSA); acquired by Cubist as part of its
September 11, 2013 acquisition of Trius Therapeutics, Inc.
- On December 30, 2013, Cubist announced
that the U.S. Food and Drug Administration (FDA) accepted the
Company’s New Drug Application (NDA) for tedizolid phosphate with
Priority Review. The FDA has assigned a Prescription Drug User Fee
Act (PDUFA) action date of June 20, 2014.
- Phase 3 pivotal studies in
Hospital-Acquired Bacterial Pneumonia (HABP)/Ventilator-Associated
Bacterial Pneumonia (VABP) are expected to begin in the first
quarter of 2014.
- In the first half of 2014, the Company
plans to submit a Marketing Authorization Application (MAA) to the
European Medicines Agency (EMA).
Ceftolozane/tazobactam – a potential first-line
therapy being studied for the treatment of certain serious
Gram-negative bacterial infections, including those caused by
multi-drug resistant Pseudomonas aeruginosa.
- On November 25, 2013 and December 16,
2013, respectively, Cubist announced positive top-line results from
the Company’s pivotal Phase 3 clinical trials of
ceftolozane/tazobactam in complicated urinary tract infections
(cUTI) and complicated intra-abdominal infections (cIAI).
- Cubist is on track to file an NDA for
ceftolozane/tazobactam in cUTI and cIAI in the first half of
2014.
- The Company expects to initiate a
pivotal Phase 3 trial to assess the safety and efficacy of
ceftolozane/tazobactam in HABP/VABP in the first half of 2014.
- Cubist plans to submit an MAA for
ceftolozane/tazobactam in cUTI and cIAI to the EMA in the second
half of 2014.
CB-618 – a novel, broad-spectrum beta-lactamase inhibitor
(BLI) investigational compound discovered by Cubist to combat
resistance to certain beta-lactam antibiotics and serious
infections, including those caused by carbapenem-resistant
Enterobacteriaceae (CREs) and Klebsiella pneumoniae carbapenemases
(KPCs).
- On January 10, 2014, Cubist submitted a
Clinical Trial Application (CTA) to the Dutch Competent Authority
and Ethics Committee to initiate a first-in-human study of CB-618
in the Netherlands. The Company has since received approval from
the Dutch Competent Authority and Ethics Committee to initiate the
study.
********************CONFERENCE CALL &
WEBCAST INFORMATION***********************Cubist will host a
conference call and live audio webcast to discuss both its fourth
quarter andfull year 2013 financial results, business activities
and financial outlook.
WHEN: Thursday, January 23, 2014 at 5:00 p.m.
ET
U.S./CANADA ATTENDEE DIAL-IN: (855)
319-7654INTERNATIONAL ATTENDEE DIAL-IN: (484) 756-4327Attendee
Passcode: 29092793
24-HOUR REPLAY U.S./CANADA: (855)
859-205624-HOUR REPLAY INTERNATIONAL: (404) 537-3406Conference ID:
29092793
CALL WILL ALSO BE BROADCAST LIVE, LISTEN ONLY,
VIA THE WEB
AT:https://cubist.webex.com/cubist/onstage/g.php?t=a&d=625478620Attendee
Password: 01232014
Replay will be available for 30 days via the
Internet at
www.cubist.com*********************************************************************************
Use of Non-GAAP Financial Measures
Cubist has presented certain non-GAAP financial measures,
including non-GAAP adjusted operating income, non-GAAP net income,
non-GAAP diluted earnings per share, non-GAAP cost of product
revenues, non-GAAP R&D expenses, non-GAAP SG&A expenses,
non-GAAP other income (expense) and non-GAAP provision for income
taxes. These non-GAAP financial measures exclude certain amounts,
expenses or income, from the corresponding financial measures
determined in accordance with U.S. Generally Accepted Accounting
Principles (GAAP). Management believes this non-GAAP information is
useful for investors, taken in conjunction with Cubist's GAAP
financial statements, because it provides greater transparency
regarding Cubist’s operating performance. Management uses these
measures, among other factors, to assess and analyze operational
results and trends and to make financial and operational decisions.
Non-GAAP information is not prepared under a comprehensive set of
accounting rules and should only be used to supplement an
understanding of Cubist’s operating results as reported under GAAP,
not as a substitute for GAAP. In addition, these non-GAAP financial
measures are unlikely to be comparable with non-GAAP information
provided by other companies. The determination of the amounts that
are excluded from non-GAAP financial measures is a matter of
management judgment and depends upon, among other factors, the
nature of the underlying expense or income amounts. Reconciliations
between these non-GAAP financial measures and the most comparable
GAAP financial measures for the fourth quarters and years ended
December 31, 2013 and 2012 are included in the tables accompanying
this press release after the unaudited condensed consolidated
financial statements.
About Cubist
Cubist Pharmaceuticals, Inc. is a biopharmaceutical company
focused on the research, development, and commercialization of
pharmaceutical products that address significant unmet medical
needs in the acute care environment. Cubist is headquartered in
Lexington, Mass. Additional information can be found at Cubist’s
web site at www.cubist.com. Connect with Cubist on Twitter
@cubistbiopharma and @cubistcareers, LinkedIn, or YouTube.
Forward-Looking Statements
This press release contains forward-looking statements. Any
statements contained herein which do not describe historical facts,
including but not limited to, statements regarding: our unaudited
expected fourth quarter and full year 2013 financial results; our
2014 revenue guidance; the therapeutic and commercial potential of
our products and product candidates; the expected timing for
commencing clinical trials, including our planned Phase 3 pivotal
studies for HABP and VABP for tedizolid phosphate and
ceftolozane/tazobactam, and for regulatory filings and responses
for our products and product candidates, including our planned
tedizolid phosphate and ceftolozane/tazobactam MAA submissions to
the EMA and our NDA for ceftolozane/tazobactam in cUTI and cIAI;
our Phase 3 clinical data for ceftolozane/tazobactam in cUTI and
cIAI; and our Building Blocks of Growth five-year goals through
2017 are forward-looking statements which involve risks and
uncertainties that could cause actual results to differ materially
from those discussed in such forward-looking statements. Such risks
and uncertainties include, among others: the risk that our final
fourth quarter and full year 2013 and 2014 audited financial
results will differ materially from our expected results disclosed
in this release; risks related to drug development and
commercialization, including the fact that drug discovery and
development is complex, time consuming, expensive and fraught with
a high risk of failure; our ability to achieve our short-term and
our long-term goals, including as a result of our ability to
continue to grow revenues from the sale of CUBICIN, DIFICID and
ENTEREG, generic and other competition, manufacturing issues, our
ability to successfully develop, gain marketing approval for and
commercially launch our product candidates for their planned
indications and on their expected timelines, and our ability to
discover, in-license or acquire new products and product
candidates; regulatory developments in the United States and
foreign countries, including the risk that the FDA and foreign
regulatory authorities may not agree with our interpretation of the
results from our clinical studies of ceftolozane/tazobactam and
tedizolid, may not approve on a timely basis or at all, our
marketing authorization applications for ceftolozane/tazobactam and
tedizolid phosphate or may require additional data, analysis,
information or further studies that may not be clinically feasible
or financially practicable; the review of our NDA for tedizolid may
take longer than anticipated due to internal FDA constraints; any
marketing approval for any of our product candidates may impose
significant limitations on its use and additional post-marketing
requirements; competitive risks from current and future therapeutic
alternatives to our products and product candidates, including
generic competitors such as Teva, Hospira and Strides; our ability
to maintain and enforce intellectual property protection for our
products and product candidates; additional clinical trials of our
products and product candidates may produce negative or
inconclusive results or may not be initiated or conducted in a
timely manner; technical difficulties or excessive costs relating
to the manufacture or supply of our products and product
candidates, including our ability to work with, and the performance
of our third party contract manufacturers that manufacture and
supply our products and product candidates on our behalf; our
ability to work with, and the performance of our third party
contract research organizations that help us conduct our clinical
trials; and those additional factors discussed in our most recent
Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission. We caution investors
not to place considerable reliance on the forward-looking
statements contained in this press release. These forward-looking
statements speak only as of the date of this document, and we
undertake no obligation to update or revise any of these
statements.
CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
UNAUDITED
(in thousands)
December 31, 2013 2012
ASSETS Cash, cash equivalents and investments $ 578,558 $
979,396 Accounts receivable, net 123,155 93,467 Inventory 116,829
79,440 Property and equipment, net 177,544 166,465 Deferred tax
assets, net 52,108 14,190 In-process research and development
896,400 272,700 Goodwill 383,018 114,130 Other intangible assets,
net 721,066 152,830 Other assets 97,143 59,767 Total
assets $ 3,145,821 $ 1,932,385
LIABILITIES AND
STOCKHOLDERS’ EQUITY Accounts payable and accrued expenses $
276,955 $ 209,236 Deferred tax liabilities, net 357,802 103,081
Deferred revenue 37,421 40,875 Contingent consideration 223,322
189,213 Debt and other liabilities, net 856,590 399,232
Total liabilities 1,752,090 941,637 Total
stockholders' equity 1,393,731 990,748 Total
liabilities and stockholders' equity $ 3,145,821 $ 1,932,385
CUBIST PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME
UNAUDITED
(in thousands, expect share and per
share data)
Three Months EndedDecember
31,
Twelve Months EndedDecember
31,
2013 2012 2013 2012
Revenues: U.S. CUBICIN product revenues, net $ 248,896 $ 216,041 $
907,978 $ 809,200 U.S. ENTEREG product revenues, net 13,759 10,941
51,024 40,171 U.S. DIFICID product revenues, net 12,194 —
12,194 — Total U.S. product revenues, net
274,849 226,982 971,196 849,371 International product revenues
20,888 14,478 61,237 50,454 Service revenues 1,243 3,705 12,287
23,249 Other revenues 2,761 754 9,722 3,285
Total revenues, net 299,741 245,919 1,054,442
926,359 Costs and expenses: Cost of product
revenues 80,605 61,474 260,310 230,057 Research and development
124,918 89,154 477,740 277,729 Impairment charges 55,300 38,700
55,300 38,700 Contingent consideration (54,857 ) (36,017 ) (47,577
) (29,021 ) Selling, general and administrative 85,995 47,333
257,940 171,788 Restructuring charges 23,290 — 24,319
— Total costs and expenses 315,251 200,644
1,028,032 689,253 Operating (loss)
income (15,510 ) 45,275 26,410 237,106 Other income
(expense), net (14,003 ) (7,553 ) (70,054 ) (37,510 )
(Loss) income before income taxes (29,513 ) 37,722
(43,644 ) 199,596 (Benefit) provision for income taxes
(23,507 ) (115 ) (25,073 ) 45,521 Net
(loss) income $ (6,006 ) $ 37,837 $ (18,571 ) $ 154,075
Basic (loss) income per share $ (0.08 ) $ 0.59 $
(0.27 ) $ 2.42 Diluted (loss) income per share $ (0.08 ) $ 0.51 1 $
(0.27 ) $ 2.10 1 Shares used in calculating: Basic (loss)
income per share 74,209,165 64,504,616 68,160,798 63,766,209
Diluted (loss) income per share 74,209,165 82,030,774 68,160,798
81,444,658
1 Includes add back of interest expense, debt issuance costs and
debt discount amortization on 2017 Notes to income, net of tax
effect
CUBIST PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFORMATION
UNAUDITED
(in thousands)
Three Months EndedDecember
31,
Twelve Months EndedDecember
31,
2013 2012 2013 2012
Operating (loss) income reconciliation: GAAP
operating (loss) income $ (15,510 ) $ 45,275 $ 26,410 $ 237,106
Cost of product revenues adjustments
1 13,723 6,270 30,342
22,364 Research and development adjustments
1 4,975 — 57,280
1,996 Impairment charges 55,300 38,700 55,300 38,700 Contingent
consideration (54,857 ) (36,017 ) (47,577 ) (29,021 ) Restructuring
charges 23,290 — 24,319 — Selling, general and administrative
adjustments
1 16,726 — 43,601 3,397
Non-GAAP adjusted operating income $ 43,647 $ 54,228 $
189,675 $ 274,542
Non-GAAP other income (expense)
2
(5,711 ) (3,015 ) (15,143 ) (12,551 ) Non-GAAP provision for income
taxes
2 (13,704 ) (18,551 ) (58,375 ) (91,917 ) Non-GAAP net
income $ 24,232 $ 32,662 $ 116,157 $ 170,074
1 Detail on the adjustments included herein is provided in the
tables below.
2 A reconciliation to the most comparable GAAP financial measure
is included in the tables below.
CUBIST PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFORMATION
UNAUDITED
(in thousands, except
percentages)
Three Months EndedDecember
31,
Twelve Months EndedDecember
31,
2013 2012 2013 2012
Cost of product revenues adjustments: GAAP cost of product
revenues $ 80,605 $ 61,474 $ 260,310 $ 230,057 Intangible asset
amortization (12,110 ) (4,565 ) (25,639 ) (18,331 ) Inventory fair
value step-up (1,613 ) (1,705 ) (4,703 ) (4,033 ) Non-GAAP cost of
product revenues $ 66,882 $ 55,204 $ 229,968 $
207,693
Product gross margin reconciliation:
GAAP product gross margin 72.7 % 74.5 % 74.8 % 74.4 % Intangible
asset amortization 4.1 % 1.9 % 2.5 % 2.0 % Inventory fair value
step-up 0.5 % 0.7 % 0.5 % 0.4 % Non-GAAP product gross margin 77.3
% 77.1 % 77.8 % 76.8 %
Research and development expenses
adjustments: GAAP research and development expenses $ 124,918 $
89,154 $ 477,740 $ 277,729 Acquisition-related expenses (4,369 ) —
(16,674 ) (1,996 ) Intangible asset amortization (606 ) — (606 ) —
Upfront license fees — — (40,000 ) — Non-GAAP
research and development expenses $ 119,943 $ 89,154
$ 420,460 $ 275,733
Selling, general and
administrative expenses adjustments: GAAP selling, general and
administrative expenses $ 85,995 $ 47,333 $ 257,940 $ 171,788
Acquisition-related expenses (16,726 ) — (43,601 ) (3,397 )
Non-GAAP selling, general and administrative expenses $ 69,269
$ 47,333 $ 214,339 $ 168,391
Other income (expense) reconciliation: GAAP other income
(expense) $ (14,003 ) $ (7,553 ) $ (70,054 ) $ (37,510 ) Debt
discount amortization 8,292 3,800 20,333 17,244 Loss on
extinguishment of convertible notes — 738 34,578 4,467 Loss on
disposal of property and equipment — — — 3,248
Non-GAAP other income (expense) $ (5,711 ) $ (3,015 ) $
(15,143 ) $ (12,551 )
Benefit (provision) for income
taxes: GAAP benefit (provision) for income taxes $ 23,507 $ 115
$ 25,073 $ (45,521 ) Tax adjustment (37,211 ) (18,666 ) (83,448 )
(46,396 ) Non-GAAP provision for income taxes $ (13,704 ) $ (18,551
) $ (58,375 ) $ (91,917 )
CUBIST PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFORMATION
UNAUDITED
(in thousands, except share and per
share amounts)
Three Months EndedDecember
31,
Twelve Months EndedDecember
31,
2013 2012 2013
2012 Reconciliation of net (loss)
income: GAAP net (loss) income $ (6,006 ) $ 37,837 $ (18,571 )
$ 154,075 Non-cash debt discount amortization 8,292 3,800 20,333
17,244 Loss on extinguishment of convertible notes — 738 34,578
4,467 Loss on disposal of property and equipment — — — 3,248
Intangible asset amortization 12,716 4,565 26,245 18,331 Inventory
fair value step-up 1,613 1,705 4,703 4,033 Restructuring charges
23,290 — 24,319 — Acquisition-related expenses 21,095 — 60,275
5,393 Upfront license fees — — 40,000 — Impairment charges 55,300
38,700 55,300 38,700 Contingent consideration (54,857 ) (36,017 )
(47,577 ) (29,021 ) Tax adjustment 1 (37,211 ) (18,666 ) (83,448 )
(46,396 ) Non-GAAP net income $ 24,232 $ 32,662
$ 116,157 $ 170,074
Reconciliation of diluted earnings (loss) per share: GAAP
diluted (loss) earnings per share $ (0.08 ) $ 0.51 $ (0.27 ) $ 2.10
Non-GAAP dilutive adjustments 0.37 2 (0.09 ) 2 1.72 2
0.05 2 Non-GAAP diluted earnings per share $ 0.29 $
0.42 $ 1.45 $ 2.15
Reconciliation of shares used in diluted per share
calculation: GAAP shares used in diluted earnings per share
74,209,165 82,030,774 68,160,798 81,444,658 Non-GAAP dilutive share
adjustments 20,277,221 3 295,688 4 18,518,507
3 1,962,273 4 Non-GAAP shares used in diluted earnings per
share 94,486,386 82,326,462 86,679,305
83,406,931
1 The methodology used to compute the tax adjustments above was
revised in Q1 2013 to reflect the tax effect of non-GAAP
adjustments and to include material, non-recurring discrete items
for the period. The prior year tax adjustments have been revised to
conform to the current year's presentation.
2 Includes impact of non-GAAP adjustments from GAAP net income
to non-GAAP net income and add back of interest expense and debt
issuance costs on Cubist’s outstanding convertible notes, net of
tax effect
3 Additional dilutive weighted average shares issuable upon
conversion of Cubist’s outstanding convertible notes and exercise
or vesting of Cubist’s outstanding equity awards
4 Additional dilutive weighted average shares issuable upon
conversion of Cubist’s outstanding convertible notes
Cubist Pharmaceuticals, Inc.INVESTORS:Eileen C. McIntyre,
781-860-8533Vice President, Investor
Relationseileen.mcintyre@cubist.comorMEDIA:Julie DiCarlo,
781-860-8063Senior Director, Corporate
Communicationsjulie.dicarlo@cubist.com